OPEC OK with Price, Brushes Off Cheating

[Bjlusky@aol.com]

OPEC OK with Price, Brushes Off Cheating
Wed Oct 30, 7:06 AM ET
By Himangshu Watts 

NEW DELHI (Reuters) - Leading OPEC (news - web sites) officials said on Wednesday they were happy with oil prices, shrugging off rampant quota-busting, which the cartel admits is running 10 percent above over official limits. 

"Supply of oil is fine, stocks are fine," OPEC Secretary-General Alvaro Silva told reporters, painting a rosy picture for the group ahead of its December 12 meeting. 


Quota-cheating of at least 2.35 million barrels a day over the group's 21.7 million bpd formal production ceiling did not upset the view, he said. 


"We have a committee that takes care of these issues and very continuously reviews them at each conference. To conclude, we are not worried about that," Silva told reporters on the sidelines of a global climate conference. 


Oil prices have fallen steeply in recent weeks, weighed down by rising OPEC output and the perception that the United States is prepared to give United Nations (news - web sites) diplomacy another chance in its campaign against Iraqi leader Saddam Hussein (news - web sites). 


London Brent was trading up 11 cents at $25.45 a barrel on Wednesday, down from a peak of $31 in mid-September. 


Saudi Oil Minister Ali al-Naimi, also at the New Delhi conference, said he was satisfied with prices. 


"I will say the current price levels are okay because they are within the OPEC band," Ali al-Naimi, oil minister of OPEC's leading producer Saudi Arabia, told reporters 


OPEC's reference basket of seven crudes stood at $25.35 a barrel on Tuesday, almost at the mid-point of the cartel's target band of $22 to $28 a barrel. 


"The market fundamentals are fine and provisions for winter season have been made and everything is working as normal. The only thing we can't predict are the consequences of war," Silva said.